Islamists, army face off in Somalia

"Our country has been invaded by Ethiopia ... we should have thrown them out a long time ago."

Abdullahi Yusuf Mudey, Somalia’s president reacted by saying that peace talks with Somalia's Islamic movement are no longer an option, warning that the group is "allowing al-Qaeda terrorists to set up shop in the Horn of Africa".

"This is a new chapter and part of the terror group's plan to wage war against the West," Mudey told the Associated Press.

Face off

Adding to the sense of fear, shots rang out late on Thursday night as government forces tested their arms.

Witnesses reported seeing tracer bullets and hearing heavy artillery and gun shots echo for several minutes from the airport side of Baidoa.

Abdulkadir Adan, a Baidoa resident who heard the shots as he walked home, said: "I thought the war we are waiting for had started ... I ran back to my friend's home and spent the night there."

Ibrahim Nur, Baidoa deputy governor, confirmed the shots were only a rehearsal by government troops: "This was only a test-fire, not war."

Government and Islamist troops face off just 30km outside Baidoa.

Regional diplomats fear fighting could quickly spread into a regional conflict given that arch-foes Ethiopia and Eritrea are accused of supporting the government and Islamists respectively.

Possible war

In Baidoa's coffee and tea shops, possible war between the Islamists and the Western-backed government dominated conversation.

Residents saw it as a matter of when rather than if war would break out, and many planned escape routes.

Baidoa has already seen two major suicide attacks, blamed by the government on al Qaeda-linked fighters joining the ranks of the Islamists.

Adding to the tensions, a close relative of Colonel Abdikadir Adan , the defence minister, and two bodyguards died on Friday after an attack on their convoy in a remote village, 70km west of Baidoa.

Shire told Reuters: "We are carrying out an investigation now but we suspect the Islamic courts are behind this."

But Abdifatah Ali, a senior Islamist official, denied the report. "We are not aware of it."